The start of the year saw an amazing start for Bitcoin as the asset started proving its worth globally. From multiple major investment firms backing the cryptocurrency and its decentralized blockchain technology. Startups started popping up heavily in various parts of the world as governments introduced major changes that allowed for the adoption of bitcoin. Amongst the many advancements and expansions, we saw a major improvement in renewable energy usage for the bitcoin mining industry, along with hydro cooling becoming an efficient alternative allowing for the mining of currency in warmer regions.
The United Arab Emirates was one of the top countries which formed a special space for all things crypto. The country saw a massive spike in bitcoin interest, along with crypto forums, expos, and events taking place in various cities. In addition, these events featured many new companies that utilized web3, crypto, decentralized apps and cryptocurrency to offer new products, services and digital products into the market. The thousands of visitors in multiple events made it clear that bitcoin can rightly be labeled as a top performing asset globally.
What is a top performing asset?
Money makes the world go around. While this statement may sound a little hard to comprehend at first, it is certain that the monetary aspect is crucial in all our lives. The world is always slow to adapt to newer types of assets being introduced. This is one of the reasons why people still prefer to use traditional assets to manage their investments and capital, such as gold or stocks. However, after the major adoption of bitcoin by many governments, bitcoin is coming up top as the top performing asset of 2023.
The most amazing aspect which makes bitcoin an incredible asset is the fact that it has managed to survive a lot of ups and downs this year. Most assets take a huge hit when met with uncertain conditions, macroeconomic turbulence or harsh market conditions, however, despite facing a lot this year, bitcoin has still managed to steer clear of any downfalls and has found itself on top, being regarded as a top performing asset and surpassing a growth of 163%. The only other asset to rank higher is the Nvidia Corp, which also saw significant growth.
Bitcoin saw tremendous growth and despite a rollercoaster in regards to its valuation, the currency managed to pass an all year high, and stabilize itself after many advantageous developments.
Contributing factors for the growth of bitcoin
The start of the year was not great for cryptocurrency. Bitcoin saw an all time low, and also managed to attract a lot of unwanted attention in the US. However, the second half of the year saw positive improvements. The currency began to improve in valuation against the dollar, surpassing an all year high of $40,000 for each bitcoin. There were many instances and highlights which contributed to the growth of bitcoin, but the biggest was the introduction of an ETF spot.
The bitcoin exchange traded fund spot was filed by BlackRock and received a lot of positive comments from the US justice system. Despite the raised eyebrows by the SEC, it became certain that very soon, BlackRock as well as other organizations will be granted a spot bitcoin exchange traded fund, allowing for a much easier trade and investments in Bitcoin. Ultimately, the major change would allow bitcoin to be more accessible and easier to buy, sell and invest in, hence increasing the overall demand for the cryptocurrency.
What is Sharpe Ratio and how does it apply to Bitcoin?
The Sharpe Ratio is a useful metric in the investment industry for evaluating the performance of assets, including the always intriguing world of Bitcoin. This ratio is a clever way to compare the risk and return of an investment. Applying this to Bitcoin, a higher Sharpe Ratio signifies that the digital currency is offering an exceptional return relative to the degree of risk. Think of it as an advanced metric that enables us to assess Bitcoin's performance on a risk-adjusted basis by helping us see past the erratic price fluctuations for which it is renowned.
In addition to its price fluctuations, Bitcoin's attractive ratio illustrates how well it compensates investors for the volatility it entails, making it a top-performing asset. It's comparable to the gold standard in the finance industry for distinguishing the truly remarkable from the exciting.
Bitcoin has had a tough journey since its inception, however, in recent times it has found a solid space in world economics. Not only has it been performing better than traditional assets in the past year, but it has also managed to gather widespread support. From companies investing huge sums in the development of bitcoin and cryptocurrency related technology, to the advancements in crypto mining and renewable energy. Bitcoin has been without a doubt the sole contender for the spotlight this year. The currency managed to surpass and all year high towards the end of 2023, while also showing promising signs that lead up to the next bitcoin halving.